THE FEDERAL RESERVE AND THE 1920’S

THE FEDERAL RESERVE President Woodrow Wilson won the election of 1912, and 1916 One of President Wilson’s progressive ideas was to reform (change) the U.S. financially

THE FEDERAL RESERVE President Wilson creates one of the most important financial systems in U.S. History in 1913: The Federal Reserve System: The bank of the United States It was created to bring stability to the economy and is still in use today

THE FEDERAL RESERVE What can the Federal Reserve System do? 1. Issue a new currency 2. Control the amount of money that is available to the public to control inflation: the rising cost of goods and the decrease in value of our money 3. Raise or lower interest rates on loans (Booming economy = Raise; Slowing economy = Lower)

THE FEDERAL RESERVE AND THE 1920S As WWI begins in 1914, America’s attention shifts to Europe and keeping us out of the war This would end the Progressive Era in America The U.S. joins the war in 1917 and the fighting ends two years later

THE 1920S By 1920, America wanted a “return to normalcy” and isolationism from WWI As America focuses on itself once again, we become very suspicious of immigrants The Red Scare: A crusade against suspected enemies of the state, mostly Communists and immigrants from Southern and Eastern Europe

THE 1920S The F.B.I. is created by J. Edgar Hoover and law enforcement takes over The U.S. responds to the Red Scare with the Palmer Raids: Kidnappings of innocent Americans who were suspected communists Constitutional??

THE 1920S Certain individuals didn’t fear anyone…. Women! Women felt a new freedom in the 1920s and broke away from societal norms. They stayed out late, smoked in public, and wore shorter clothes. These women were known as the Flappers

THE 1920S African-Americans also have their time to shine! Harlem Renaissance: The celebration of African- American culture in the 1920s Music, poetry, jazz, art, and African-American culture begin to be noticed across America (Rap = Rhythm and Poetry)

THE 1920S It was not a great time for alcohol however 1919 the 18 th Amendment is passed banning alcohol in this country: Prohibition Immediately you see the rise of “bootleggers,” “speakeasies,” and gangster warfare 1933 the 21 st Amendment is passed bringing alcohol back into the country

THE 1920S It is a wonderful time for business as wages increased, unemployment fell, and new inventions were being mass produced The refrigerator, washing machine, stove, but above all else… The Automobile!

THE 1920S Henry Ford now uses the Assembly Line to mass produce his Model –T car, making it affordable for most Americans This gives rise to major roads, gas stations, highway billboards, and mechanic shops It also results in Suburbanization: People start living away from the cities in suburbs

THE 1920S As the 1920s rolls along, the economy starts to slow down Businesses overproduce goods resulting in profits falling Unemployment begins to rise and stock prices begin to fall and don’t stop until…..